7-Eleven sets aside P2 B for expansion

MANILA, Philippines - The local operator of convenience store chain 7-Eleven is upbeat on earnings this year as it plans to spend P2 billion for expansion, an official said.

Philippine Seven Corp. president Jose Victor Paterno told reporters in a chance expand he expects this year to be a good year for the firm  as it invests more to expand its reach in the country.

“We’re investing a lot this year. We’re doubling our business. Our capex budget is P2 billion,” he said.

The P2 billion to be spent this year, he said, is the highest capital expenditures budget set by the firm so far.

The firm which has over 800 stores at present, is planning to increase its presence to hit 1,000 stores this year.

“We intend to hit our 1,000th store sometime in the fourth quarter. Hopefully earlier rather than later,” Paterno said.

As Philippine Seven is raising its capital expenditures this year, he said the firm is considering tapping the debt market or issuing stock.

The firm is also optimistic this year as the implementation of Republic Act 10351 or the Sin Tax Reform Law, which raised the taxes on alcohol products and cigarettes, has supported its sales.

“The year has started out very well for us. We are actually beneficiaries of the sin tax (law),” he said.

“Basically, prices of cigarettes have gone up and that means more revenues,” he said further.

Asked about the firm’s full-year net income for 2012, he said growth posted last year “may be a little more” compared to what was seen in 2011.

The firm’s net profit rose by 29 percent year-on-year to P356.3 million in 2011.

As of September last year, the firm’s net income reached P224.4 million, 28.4 percent higher than in the same period in 2011.